I am the David and Joan Traitel Senior Fellow and member of the Working Group on Health Care Policy at the Hoover Institution of Stanford University. My research includes health care policy and the roles of government versus the free market in access, pricing, and quality of medical care. I served as Professor and Chief of Neuroradiology from 1998 until 2012 at Stanford University Medical Center before my appointment at Hoover.

The Unraveling Of Obamacare

Despite the attempt to highlight the new Census Bureau’s reported net decrease in uninsured of 1.3 million people, or 0.6%, as a success story for the Affordable Care Act, we know the reported drop in the number of uninsured actually reflects increases only in government insurance, including 2 million newly insured under Medicare merely by aging, and another 2 million joining Medicaid; likely as a consequence of the economic stagnation under this administration.

Meanwhile, ObamaCare’s failures are already widespread.

A key source of the ACA’s projected savings, the CLASS entitlement designed to provide unlimited, lifetime benefits for long-term care, was quickly abandoned. Recognizing that its premiums, $86 billion by 2021, would finance the rest of ObamaCare instead of its own costs, Sen. Kent Conrad (D-N.D.) called CLASS “a Ponzi scheme of the first order, the kind of thing that Bernie Madoff would have been proud of,” and vowed to block its inclusion in the Senate bill. Medicare Chief Actuary Richard Foster calculated the program needed to enroll more than 230 million— more than the entire nation’s workforce — to be financially feasible. HHS Secretary Kathleen Sebelius was forced to admit last October that the plan simply wouldn’t work, even backpedaling to Congress that “my comment was that it was unsustainable as the legislation was crafted.” CBO Director Douglas Elmendorf noted that month that the “CBO would have estimated that the Repeal the CLASS Entitlement Act would increase federal budget deficits by $83 billion over the 2012– 2021 period, relative to the March 2011 baseline,” thereby eliminating 40 percent of the CBO’s previous budgetary savings of the ACA.

The ACA’s Accountable Care Organization (ACO) blueprint was unworkable from the start. Touted as a new model where doctors and hospitals work together to eliminate unnecessary care, the Centers for Medicare and Medicaid pilot program did not work, saving only $100 per beneficiary annually. Even though President Obama put forth Mayo Clinic and Geisinger Clinic as models of what he wanted to achieve, the American Medical Group Association, representing those very same organizations – Mayo Clinic, Cleveland Clinic, Geisinger Clinic and many other premier health care groups – wrote the administration that a full 93 percent of its members would not participate, because the rules were “overly prescriptive, operationally burdensome, and the incentives are too difficult to achieve.”

The ACA’s medical device tax – on revenues, not just profits – is already destroying high-paying jobs for Americans and moving them overseas.Directly accounting for more than 400,000 high-paying U.S. jobs of the sort our young people seek, these companies are already eliminating jobs because of ACA’s onerous taxes. ACA’s new taxes will cost Boston Scientific more than $100 million a year, so they built a $35 million research center in Ireland instead of the U.S. and announced another $150 million site in China. Stryker of Michigan announced job cuts of 1,000 workers last November “in advance of the new Medical Device Excise Tax.” CEO Curt Hartman reiterated this month that the tax will force companies to move their operations overseas, eliminating American jobs.

CookMedical of Indiana scrapped plans to open five new plants in the Midwest, while saying “in reality, we’re not looking at the U.S. to build factories anymore as long as this tax is in place.” CEO Alex Lukianov of San Diego’s NuVasive wrote “to offset this tax increase, we will be forced to reduce investments in research and development and cut up to 200 planned new jobs next year” and “as a result of the law, for the first time in our history we are being compelled to consider moving manufacturing, clinical trials and investment in new innovation to more business-friendly countries.” And CEO Mark Waite of Lighthouse Imaging in Maine stated what is obvious to anyone with an understanding of business – “”This [tax] will end up making the cost of goods higher, and since most of these medical devices are required, as opposed to being optional, that cost gets passed on to the consumer and the cost of care goes up.”

The Medical Loss Ratio mandate is already forcing insurers out of the market and reducing insurance choices for Americans.Five insurers, including two of the nation’s largest, already decided to stop selling health insurance in Indiana, mainly because of the ACA edict, according to the IndianapolisBusiness Journal. And the American Enterprise Group, citing the medical loss ratio and other regulatory burdens, will stop offering individual insurance in more than 20 states, causing 35,000 people to lose their coverage and create a less competitive insurance market. Ironically, young adults are also seeing their choices disappear, as colleges are dropping low cost, limited coverage plans altogether or pricing students out of health insurance because of these actuarial requirements and the bureaucrat-defined list of “essential” benefits dictated by ObamaCare.

A repeated series of waivers to the ACA were urgently granted by HHS, in order to prevent widespread loss of coverage and substantial premium increases caused by ObamaCare’s own decrees.More than a thousand waivers to unions, states, and corporations that cover about 4 million people were granted to avoid “significant increases in premiums or significant decreases in access to health care benefits”… “needed to meet the annual limit requirement” wrote John Dicken, Director of Health Care Issues for the GAO in his letter to Congress.

Meanwhile, ObamaCare forces highly publicized rebates, but the truth is that they may or may not amount to much. As the Virginia-Pilot reported, “Clifton Alford, a Norfolk chauffeur, opened two letters from his health insurer on the same day this summer. One contained a $9.83 rebate check; the other announced a $44 increase in his monthly premiums for the same plan. Alford, 36, said he was tempted to cash the check in pennies: ‘The only other thing I can think of to do would be to send it to Washington and tell them where to shove it.’”

The record is clear – since its rush to passage by President Obama and the Democrat-controlled Congress in 2010, the ACA is doing harm. While the president’s supporters try to control the message, it becomes even more urgent that all Americans realize that an alternative choice is at hand. As opposed to President Obama’s passion for more government control, Governor Romney trusts free market solutions. And instead of government panels to limit care, Mitt Romney’s commitment is that all Americans deserve the right to decide with their doctors how aggressively they want to pursue advanced medical care. Mitt Romney and Paul Ryan want Americans and their families to control their own health care decisions. Their plan would facilitate competition to improve choice and reduce costs, and provide seniors with the option of private insurance. But giving seniors a choice is an idea that this administration finds unacceptable.

At the inception of ObamaCare, then Speaker Nancy Pelosi said Congress had to “pass the bill so you can find out what is in it.” And now we have found out. Filled with new entitlements and symbolic hand-outs, the true impact of this extraordinarily damaging law has only just surfaced in advance of its most destructive effects to come. Only the voters can stop it.

Scott W. Atlas, MD is the David and Joan Traitel Senior Fellow at the Hoover Institution, Stanford University, an advisor to the Romney for President campaign, and author of the recently published book In Excellent Health: Setting the Record Straight on America’s Health Care (Hoover Press, 2011).

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